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Merry Christmas!

December 25th, 2009 . by economistmom

Happy Holidays to all my readers!  I will be posting less frequently over the next week–but have no fear, I will be back with a vengeance around New Year’s with some EconomistMom “resolutions.”  Until then, just want to make sure you all saw the Concord Coalition’s new issue brief on the “end game” on health care reform.  As summarized on Concord’s Tabulation blog:

With the House having passed its version of health care reform (H.R. 3962) and the Senate on the verge of passing its version (H.R. 3590), the outline of a final bill is beginning to take shape. In our new Issue Brief, we look ahead at the fiscal considerations that will likely be the subject of conference committee discussions and “end game” negotiations. These include the cost of expanding coverage, the methods used to prevent that cost from adding to the deficit, and the prospects for systemic reforms to reduce cost growth over time.This issue brief gives The Concord Coalition’s perspective on how the bills measure up, what the risks are and how these risks could be lessened. We conclude that:

•    Both bills establish an important benchmark by achieving deficit reduction according to official cost estimates by the Congressional Budget Office (CBO). However, the fiscal outlook remains on an unsustainable track even with the modest deficit reduction achieved under either plan.

•    There are clear risks that some of the methods used to achieve deficit reduction in the official scores may not hold up over the long-term.

•    The revenue package in the Senate bill holds more promise to reduce the deficit than the House version because its largest component — the high-cost insurance excise tax — will better keep up with the growth rate of health care spending, and will also work to lower health care costs.

•    Both bills contain many promising reform strategies to achieve long-term cost control. However, these strategies remain unproven and cannot be counted on to produce timely, reliable savings without a strong cost control mechanism such as the Senate’s proposed Independent Payment Advisory Board (IPAB).
The “Fiscal Risks” mentioned in the discussion include:
  • Doing nothing
  • Spending offsets that are not maintained over time
  • “Curve benders” that don’t pan out or are not adopted more broadly
  • Failure to include an effective cost control mechanism
  • Lagging revenue increases
  • General revenue bailout of the CLASS provision
  • Inadequate premium subsidies, weak penalties, and a poorly designed exchange
In our conclusion we discuss the possible changes that could be added to the legislation to lessen these risks and further promote fiscal responsibility.
I’d like to point out that as difficult as Senate negotiations were, the differences to be smoothed out in conference between House and Senate leaders are much bigger, yet have gotten relatively little attention or discussion thus far.  Two biggies:  (1) the Independent Payment Advisory Board (sometimes more boldly/accurately labeled with the words “Medicare” and “commission”) that is in the Senate bill but not in the House version (Concord would like to see it in the conference version), and (2) the revenue offsets, where House and Senate versions differ markedly and where both bodies pretty much despise the other’s (Concord prefers a version like the Senate’s where the tax base is somehow tied to employer-provided health benefits rather than the House’s over-reliance on taxing the rich on a base that will not keep up with the still-growing costs of health care).

And to celebrate Christmas, the Washington Post’s Steve Pearlstein interviews Santa Claus (who apparently works just down the hall from Steve…) on who’s been “naughty” vs “nice” this year. Enjoy!

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